It's lost in transition

To meet Anuradha Sivarajan and listen to what her mainly female team of shy, young engineers can offer retail companies around the world is to understand the power of Indian information technology and the potential of emerging, young India.

A personable, confident management graduate, Sivarajan is not yet 30. In a laboratory dressed up like a supermarket to make it seem real-world for prospective customers, mainly large retail companies, this young team leader tells me what her team can offer, here at the 'Retail Innovation Lab' of India's largest technology company, Tata Consultancy Services (TCS).

The journey starts from e-commerce websites customised to mouse-click patterns; travels through an iPhone application that tracks your location, tells you of promotions based on your wishlist and buying habits, lets you compare products, tweet, find stocks in nearby stores and their location; and ends with an explanation of new uses for mobile phones — wave them at cash registers to pay or at posters to grab redeemable discounts.

"Everything is possible," says Sivarajan. "It all depends on what the market wants."

On another floor, I visit the 'Travel and Hospitality Lab', dressed up like the interiors of an airliner. They offer to integrate everything from 60-year-old reservation systems with modern cloud-based loyalty programmes, visions of the future deliverable today.

These visions crumble when you step out on the road outside, the IT Expressway, to use its popular but misleading name. Officially, this is the Rajiv Gandhi Salai, also known as the OMR (Old Mahabalipuram Road). Barely a road in 1993, heading east out of Chennai, it is now a 10 km, four-lane highway that embodies India's exciting today and clouded tomorrow.

Some big names on the IT Expressway include: Wipro, Infosys, TCS, Cognizant, e-Bay and Accenture. Between these offices, other signboards indicate how a thriving technology industry creates a sprawl of businesses that feed off and fuel it. There's Vels Srinivasa College, Sathyabama University, engineering colleges — St Joseph's, Mohammed Sathak and Thangavdu. The Snow-White Hotel sells 'Chinese-Indian' biryani, 'Google' sells shoes. There are duplex apartments with 'plunge pools', the AKDK Golf village, fertility centres and stores selling modular kitchens, spas, drinking-water tanker services. Every major bank is here, alongside a flood of women-only hostels, some with 'gym, beauty parlour, indoor games', home to the women who work along the IT Expressway.

But the third world is ever present: the road is terrible, there are no shoulders, no pavement, and garbage is everywhere. There isn't enough water and electricity.

The IT expressway is no exception.

In India's technology heartland, Bangalore, first-world India is increasingly sequestered from the crumbling metropolis beyond. Global Bangalore has divorced itself from local Bangalore, which increasingly feels and behaves like a third-world city.

The Bangalore municipal authorities collect no more than a third of the city's garbage. Unfinished flyovers and underpasses — many under construction for more than three years — send up lung-clogging clouds of dust and smoke from horrific traffic snarls. The city's infrastructure is so decrepit that many of Bangalore's 1,600 technology companies run their own transport services, sewage and water systems and generate their own electricity.

The government wasn't always this apathetic. It was the state that laid the groundwork for the technology era in the 1960s-70s by setting aside space and resources for education and research institutes. The irony is that when private technology enterprise took off in the 1990s, the wealth it generated corrupted the government.

At bellwether Infosys Ltd, senior executives explain the municipal skills of India's fourth-largest information technology company as easily as they might cloud computing. Infosys' annual report tells you the water tanks on its campuses can store 33 million litres — enough to supply Shimla. Infosys' diesel generating sets can produce 134 megawatts of electricity - almost enough to power Mysore.

You could argue that adversity at home helps Indian companies flourish in kinder countries. True. But running in-house municipal services is economic nonsense. For instance, captive power costs about Rs 12 per unit; grid power is Rs 5.50 per unit.

India's $70 billion technology sector is special. These are the companies that first took India global. These are the professionals who transcended India's crony capitalism and established a creed of innovation, professional merit and sparked national self-confidence.

Mohandas Pai, former Infosys board member and now chairman of Manipal Education recently told me how Bangalore, if it had not sunk into decrepitude, could have added 300,000 tech jobs to the current 500,000. Using the conservative metric that every technology jobs generates at least four in-related services, whether construction, taxi services and hospitality — I must mention the explosion in playschools across Bangalore — this means a city of eight million people has lost about a million jobs. Things are no different in the other strained cities that host technology industries: Gurgaon, Pune and, to a lesser extent, Hyderabad (the super-smooth, eight-lane Nehru Outer Ring Road from the airport shows cities can get it right).

For now, Indian technology companies are sailing well enough against stiffening global headwinds. The battering that the national image has taken over a year of scandals, and stalled governance hasn't yet affected its first world islands of excellence.

But things will get harder in this era of declining revenues, depressed first world markets and changing business models. If an economic freeze sets in, the extra millions (or billions) the tech companies waste on keeping the third world out of their offices could prove to be costly — to themselves and to India.